Recovery is slow for area businesses
More than two years into a technical economic recovery, just over half of all businesses surveyed in Fairfield County (53%) are profitable. While most believe conditions for their companies will either remain stable (40%) or improve (38%), they are far less confident about the economic outlook for Fairfield County as a whole.
Those are some of the overall findings of a survey released today at the CBIA/Stamford Chamber of Commerce Economic Outlook luncheon.
The biennial Fairfield County Business Survey examined the workforce, energy, and transportation challenges for companies in Fairfield County and the economic, financial, and regulatory climates in which they operate. The survey was emailed to approximately 3,000 businesses; 195 completed the survey, for a response rate of 6.5%.
Key findings:
- Business profitability was clobbered by the recession. Though most businesses (84%) were profitable immediately before the recession, only 46% turned a profit during the recession.
- Profitability saw only modest improvement over the last two years. An upswing in 2010 (60% of respondents recorded a net profit) was tempered by a dip this year (only 53% expect to be profitable in 2011).
- Nearly half of all respondents (48%) report that skilled workers are not readily—or at all—available in Fairfield County. This is a sharp increase over 2009, when 22% said skilled workers were not readily or at all available. Despite a statewide unemployment rate hovering around 9%, only 39% of respondents today say Fairfield County has a sufficient number of skilled/educated workers. In fact, more than one in ten businesses surveyed said a labor shortage is preventing them from expanding.
- Only 18% expect any improvement in the economic outlook for Fairfield County in 2012; 44% expect conditions over the next year to get worse.
- While many firms are on track for growth, a sizable minority are struggling: 24% are in the red this year, and 23% expect conditions to deteriorate further in 2012.
- Nearly one-third of businesses surveyed (31%) plan to expand in the next five years; another 13% recently expanded. The biggest barrier to expansion, noted by more than half of businesses (51%), is the cost of doing business—including taxes and regulations.
- Only 15% of respondents today (compared to 43% two years ago) agree or strongly agree that their state and local taxes are reasonable, and nearly three-quarters (74%) believe government makes it harder for their companies to succeed.
- When asked in 2009 to predict the single greatest challenge to operating a business in Fairfield County over the next five years, nearly 20% of businesses surveyed identified problems with the region’s transportation infrastructure. Forty-three percent of respondents then—and now—said the most effective action state government could take to address the issues would be improving I-95 and expanding highway capacity by adding lanes. Expanding the rail system was also a top choice.
This year’s survey and Economic Outlook were sponsored by BlumShapiro and TD Bank. The luncheon featured top business and economic experts, including Christine Cumming, first vice president and chief operating officer of the Federal Reserve Bank of New York, discussing the Connecticut, New York, and New Jersey economies.